Oct. 8 (Bloomberg) -- The Teamsters, United Auto Workers and other labor unions plan to oppose health-care legislation being considered by a U.S. Senate panel unless changes are made to the “deeply flawed” bill, according to a draft advertisement prepared for Washington newspapers.

The advertisement, circulated yesterday among the unions, calls for a so-called public option that would compete with private insurers, elimination of a proposed tax on health plans and requiring almost all employers to provide health care or contribute to a fund that would subsidize coverage.

The ad would run if the Senate Finance Committee approves draft legislation introduced by Chairman Max Baucus. The panel may vote next week. The ad says “we will oppose” the bill if it goes to the Senate floor without changes that make “substantial progress to address the concerns of working men and women.”

Union leaders discussed potential opposition to the bill in a conference call yesterday with White House chief of staff Rahm Emanuel, according to people familiar with the call. American Federation of State, County and Municipal Employees President Gerald McEntee, Teamsters President James Hoffa and Communications Workers of America President Larry Cohen were among the labor leaders on the call.

The White House press office didn’t immediately respond to a request for comment.

‘Cadillac’ Insurance Tax

The Finance Committee’s draft legislation would tax so- called Cadillac insurance plans by imposing a 40 percent excise tax on policies valued at more than $8,000 for individuals and $21,000 for families. Labor unions argue in their advertisement that the taxation discriminates against workers.

The measure, which the full committee may vote on as early as next week, doesn’t include a public option or a mandate that employers provide health insurance.

In addition to the autoworkers and the International Brotherhood of Teamsters, the proposed ad was sent to more than 30 unions. Among them were leaders of the American Federation of State, County and Municipal Employees, the United Steel Workers, the International Brotherhood of Electrical Workers, and the National Football League Players Association.

Labor leaders, including AFL-CIO President Richard Trumka, have said for months that a public option must be part of an overhaul of the nation’s health system.

About three out of five House Democrats say they’re against the Senate proposal to tax Cadillac insurance plans, setting the stage for a clash over the provision that would fund about one- quarter health-care legislation from Baucus, a Montana Democrat.

“This proposal and excise tax isn’t about just affecting those who work for Goldman Sachs at the top of the economic ladder,” Harold Schaitberger, general president of the International Association of Fire Fighters, said Wednesday at a rally with House Democrats outside the Capitol. “This would affect firefighters all across this nation and other middle- class workers.”

To contact the reporters on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net

Last Updated: October 8, 2009 00:00 EDT